T-Bills Yield Unchanged as CBN Sets to Roll Over N77.61 Bln
The average yield on Nigerian Treasury bills instruments remained unchanged on Tuesday in the secondary market ahead of the Central Bank (CBN) primary market auction (PMA) to roll over maturing bills.
Tomorrow, the CBN is scheduled to conduct a Primary Market Auction to roll over Treasury bills maturities worth ₦77.61 billion across 91-day (₦4.22 billion), 182-day (₦7.46 billion), and 364-day (₦65.93 billion) tenors.
Analysts predicted that the subscription level at the Nigerian Treasury Bills auction would still be strong but no consensus was formed on spot rates expectation for the auction.
Though, rates are expected to fluctuate significantly in the pre-election year as Debt Management Office (DMO) implement a borrowing plan for 2022.
In the money market, the financial system liquidity was strained, causing upward rate repricing on short term money market instruments, data from the FMDQ Exchange shows.
The average interbank rate climbed by 175 basis points on Tuesday to close at 15.88%. The increase came following 175 basis points jump in both the Open Buy Back rate and Overnight rate to close at 15.50% and 16.25%.
In the Treasury bills secondary market, trading activities on the instrument was muted. Alpha Morgan Capital said in a market report the space witnessed flatness across all ends of the curve.
Consequently, the average yield on the instrument remained flattish to close at 4.58% ahead of the CBN auction on Wednesday.
Also, activities at the Federal Government of Nigeria (FGN) bond secondary market traded on a quiet to bullish note in today’s session. Buying interests were seen at the mid and long ends of the curve, according to analysts’ notes. As a result, the average yield spiralled downward by 6 basis points to close at 11.88%.
In the OMO bills market, the average yield across the curve increased by 10 bps to close at 5.62 per cent as against the last close of 5.52 per cent. Average yield across the long-term maturities expanded by 20 basis points, according to FSDH Capital note.
However, the average yield across the short-term maturities remained unchanged at 5.52 per cent. OMO 4-Oct-22 (+21 bps) and OMO 16-Aug-22 (+18 bps) maturity bills witnessed selling pressure.
Meanwhile, activities at the FGN Eurobond market traded on a bearish note as selling pressures were seen across the sovereign curve. Today, the slide in FGN Eurobond price caused the average yield to increase by 12 basis points to close at 7.08%.
The DMO has started offering a 2-Year FGN Savings Bond due January 19, 2024, and a 3-Year FGN Savings Bond due January 19, 2025, at the interest rate of 7.542 per cent per annum and 8.542 per cent per annum, respectively.
The bond auction is scheduled to close on January 14, with settlement on January 19. The interest will be paid quarterly, with a redemption bullet repayment on the date of maturity. # T-Bills Yield Unchanged as CBN Sets to Roll Over N77.61 Bln
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